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The Central Bureau of Investigation (CBI) has arrested eight employees of state-run Punjab National Bank and two directors of a Mumbai-based private firm in a $1.4 million fraud case, it said on Wednesday.

The case is different from a much bigger one involving billionaire jeweller Nirav Modi and his associates, although it took place at the same branch of the bank, said a CBI spokesperson.

"The case was registered on the allegations of defrauding of Punjab National Bank ... in the matter of dishonest and fraudulent issuance of two Letters of Undertakings aggregating to the said amount," the CBI said in a statement.

The eight arrested officials were from the Brady house branch where Modi and his uncle Mehul Choksi have been accused of raising more than $2 billion in foreign credit using fake bank guarantees issued by rogue bank staff between 2011 and 2017. They have been sent to police custody till December 21, reported news agency PTI.

Modi and Choksi have denied wrongdoing and left India before the controversy came to light in February.